CROSS ASSET: Recovery in Yields support the Dollar
Feb-06 08:22
- Some upside continuation for the Dollar helped by US Treasuries fading lower, US 10yr Yield pulls away from the next Yield support noted at 4.40%, it printed a 4.4001% low Yesterday.
- The Kiwi is still the worst performer within G10s, but the Dollar is testing broader intraday highs here, versus the MYR, SGD, CNH, GBP, EUR, CHF, PLN, NOK, AUD, NZD and CAD.
- As mentioned earlier, the next immediate support in Cable is at 1.2420 (20 day EMA), ahead of the BoE.
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GILTS: Flat Start, Long End Supply Due
Jan-07 08:20
Little net movement in gilts as softer-than-expected French CPI counters earlier selling in Bunds.
- Futures +10 at 92.05,
- Bearish technicals intact in the contract.
- Initial support at the Dec 19 low/bear trigger (91.64), while initial resistance is located at the Jan 2 high (92.88).
- Yields little changed across the curve to start.
- Gilt/Bund 10-Year yield spread flat at 216bp.
- SONIA futures 0.5-1.5bp higher on the day with wider bonds off lows and BoE-dated OIS showing 57bp of cuts through ’25 vs. 56bp early today.
- DMO issuance for calendar ’25 gets underway this morning, via GBP2.25bln of the 4.375% Jul-54 gilt.
BONDS: Bobl/Bund Block trade
Jan-07 08:13
Bobl/Bund block trade suggest a steepener, perfectly weighted.
- RXH5 ~2.35k sold at 132.40.
- OEH5 ~4.95k bought for 117.25.
SILVER TECHS: MA Studies Highlight A Dominant Downtrend
Jan-07 08:09
- RES 4: $34.903 - High Oct 23 and the bull trigger
- RES 3: $33.125 - High Nov 1
- RES 2: $32.338 - High Dec 12 and a key resistance
- RES 1: $30.507 - 50-day EMA
- PRICE: $30.184 @ 08:07 GMT Jan 7
- SUP 1: $28.748 - Low Dec 19
- SUP 2: $28.446 - 76.4% retracement of the Aug 8 - Oct 23 bull cycle
- SUP 3: $27.686 - Low Sep 6
- SUP 4: $26.451 - Low Aug 8
A bear cycle in Silver that started Oct 23 remains in play - for now - and recent gains are considered corrective. The metal has recently breached support at $29.642, the Nov 28 low. The break lower opens $28.446, a Fibonacci retracement. Note that moving average studies are in a bear-mode position highlighting a dominant downtrend. Key resistance has been defined at $32.338, the Dec 12 high. A break of this level would signal a reversal.
